Korea Zinc plans $1.5B share buyback to resist takeover efforts

Korea Zinc has repurchased 9.85% of its shares for $1.5 billion in an effort to prevent shareholders from selling their holdings to the company's main investor, Young Poong, and private equity firm MBK.

The largest zinc smelter in the world, Bain Capital, which supports Korea Zinc's present executives, separately acquired a 1.41% share in the business, the firm stated in a regulatory filing.

Korea Zinc, which is owned by the Choi family, has been engaged in a fierce struggle for control of the $18 billion zinc empire with the Chang family, who co-founded it. In September, MBK received an initial joint bid from Young Poong, the Chang family's conglomerate.

Analysts claim that prior to the buyback, the Choi family of Korea Zinc enjoyed the support of shareholders who held up to 36% of the business, including strategic partners like Hyundai Motor Group.

In order to increase shareholder value, Korea Zinc said that it would cancel all of its recently acquired shares and spend 2.07 trillion won ($1.5 billion) on the repurchase.

As fewer shares were available for trading as a result of tender bids from both parties, Korea Zinc's shares surged 10% on Monday to a record high of 1.38 million won, or 55% above their buyback price of 890,000 won. Young Poong's stock also increased by 5.3%.